The Securities and Exchange Commission (SEC) has charged two traders with manipulating over 2,000 traded stocks and gaining over $26 million in profits from subsequent trades.
Joseph Taub and Elazar Shmalo - both based in New Jersey - used several accounts at various brokers to carry out the scheme undetected.
The SEC found they used one account to buy a position in a stock and a second account to place a series of small buy orders to hike up the price for the first account to then sell its position.
Andrew Calamari, director of the SEC’s New York office, said Taub and Shmalo “schemed dozens of times per trading day to artificially move stock prices for their personal benefit.”
The SEC has filed a compliant with the federal court in Newark, New Jersey, charging against Taub and Shmalo with aiding and abetting violations of securities laws.
The US watchdog is seeking both traders return “ill-gotten gains” of $26 million made throughout the scheme and a permanent injunction.